In interest rate parity, it was understood that a country having low interest rates will have currency appreciation. But low interest rates imply more money in people’s hand, which will thereafter cause high inflation in the economy as against the ...
SSEI Q Forum Latest Questions
Cant we find the arbitrage profit by finding the difference between the forward rate (i.e., 2.1388) and the forward rate that should be (i.e., 2.11288*1.041/1.031=2.1333)? Is the entire process the only way to find the arbitrage profit or is there a ...